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United States Home Improvement Market, By Region, Competition, Forecast and Opportunities, 2018-2028F

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  • 77 Pages
  • November 2023
  • Region: United States
  • TechSci Research
  • ID: 5550588
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United States Home Improvement Market has valued at USD 448.08 billion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 4.51% through 2028. The United States home improvement industry is a vast and dynamic sector that encompasses a wide range of products and services aimed at enhancing and renovating residential properties. This industry plays a pivotal role in homeowners' pursuit of comfortable, functional, and aesthetically pleasing living spaces. Home improvement encompasses everything from minor repairs and maintenance to large-scale remodeling projects.

One key driver of the U.S. home improvement market is the country's robust housing stock, comprising millions of single-family homes and multi-unit dwellings. Homeowners and landlords regularly invest in renovations, upgrades, and maintenance to preserve and increase the value of their properties.

The industry is supported by a diverse ecosystem of retailers, suppliers, contractors, and service providers. Home improvement stores like Home Depot and Lowe's are household names, offering a wide array of products, from power tools and building materials to appliances and home décor. Meanwhile, a vast network of contractors, plumbers, electricians, and interior designers cater to the diverse needs of property owners.

Furthermore, the industry has witnessed notable growth in the adoption of sustainable and energy-efficient home improvement practices, reflecting a broader environmental and energy-conscious trend. As homeowners continue to invest in their properties, the U.S. home improvement industry is expected to remain a significant economic force, shaping the nation's residential landscape for years to come.

Key Market Drivers

Economic Factors and Housing Market Trends

Economic conditions and housing market trends have a substantial impact on the home improvement industry. When the economy is strong and consumer confidence is high, homeowners are more willing to invest in home improvement projects. During economic downturns, however, people may delay or scale back their renovation plans to save money.

Additionally, the state of the housing market is a significant driver. During periods of robust housing activity and rising property values, homeowners often engage in remodeling projects to increase the value of their homes. Low-interest rates and favorable lending conditions can also encourage homeowners to invest in home improvements by making financing more accessible.

On the other hand, during a housing market downturn, homeowners may be less inclined to invest in major renovations or additions. They may prioritize essential repairs and maintenance over discretionary projects, such as kitchen remodels or home additions. Therefore, the cyclical nature of the housing market and economic conditions strongly influence the pace and scale of home improvement projects.

In recent years, the U.S. housing market has experienced fluctuations, with periods of high demand and rising property values followed by corrections and cooling periods. These fluctuations have a direct impact on the level of activity in the home improvement industry. As the economy and housing market continue to evolve, home improvement businesses must adapt their strategies to align with changing consumer behavior and market conditions.

Aging Housing Stock and Deferred Maintenance

The aging housing stock in the United States is a critical driver of the home improvement industry. Many homes across the country were constructed several decades ago, and as they age, they require ongoing maintenance, repairs, and upgrades. This need for maintenance and renovation creates a steady stream of demand for home improvement products and services.

Homeowners often face the challenge of addressing deferred maintenance issues, which can accumulate over time when routine upkeep is postponed. These deferred maintenance needs can include roof repairs, HVAC system upgrades, plumbing fixes, and structural improvements. Home improvement companies can capitalize on this driver by offering services that address these essential maintenance requirements.

Furthermore, as housing stock ages, homeowners may seek to modernize their properties by updating outdated designs and systems. This can involve renovating kitchens, bathrooms, and other living spaces to improve functionality and aesthetics. The desire to bring older homes into the 21st century drives a significant portion of the home improvement market.

To tap into this driver, businesses can offer renovation solutions that cater to the unique needs of older homes. Whether it's preserving historical character or integrating energy-efficient technologies, addressing the aging housing stock presents both challenges and opportunities for industry.

Sustainability and Energy Efficiency

The growing emphasis on sustainability and energy efficiency is another important driver of the U.S. home improvement industry. Homeowners are increasingly interested in eco-friendly and energy-saving solutions, not only to reduce their environmental footprint but also to lower utility bills and enhance property value.

This driver is evident in the adoption of green building practices and the installation of energy-efficient appliances, insulation, windows, and HVAC systems. Solar panels and smart home technologies, which help homeowners manage energy consumption, are also on the rise.

Government incentives and regulations further boost this driver. Federal and state incentives, tax credits, and rebates are often available to encourage homeowners to invest in energy-efficient upgrades. Building codes and standards also evolve to incorporate eco-friendly practices, making it necessary for home improvement companies to stay current with these regulations.

For home improvement businesses, embracing sustainability and energy efficiency can be a competitive advantage. Offering green building materials, providing expertise on energy-efficient solutions, and helping homeowners access available incentives can set companies apart in a market increasingly focused on environmental responsibility.

Technological Advancements and Digitalization

The home improvement industry has been significantly influenced by technological advancements and digitalization. These changes have impacted various aspects of the industry, from how consumers research and plan projects to how companies operate and deliver their services.

Online Research and Inspiration: The internet has become a primary source of information and inspiration for homeowners embarking on home improvement projects. Platforms like Houzz, Pinterest, and Instagram are popular for discovering design ideas, product recommendations, and project inspiration. Businesses that maintain a strong online presence and engage with customers through digital platforms can leverage this driver effectively.

E-Commerce: The rise of e-commerce has transformed how home improvement products are bought and sold. Online marketplaces and retailers offer a vast selection of items, from building materials to appliances, delivered directly to the customer's doorstep. This shift in shopping behavior has prompted brick-and-mortar stores to adapt and create seamless omnichannel experiences.

Augmented Reality (AR) and Virtual Reality (VR): AR and VR technologies are increasingly used for home improvement planning. Consumers can visualize how various products and designs will look in their homes, aiding in decision-making and reducing the risk of dissatisfaction with the final result. Companies that integrate AR and VR tools into their services enhance the customer experience.

Mobile Apps: Many home improvement companies have developed mobile apps to streamline communication, project management, and scheduling. Apps can also offer virtual consultations, enabling homeowners to discuss projects with professionals without physical meetings.

Embracing technological advancements and digitalization is essential for staying competitive and meeting customer expectations in today's home improvement industry. Whether through user-friendly websites, e-commerce capabilities, or innovative design tools, companies that adapt to these digital trends are more likely to thrive.

In conclusion, the United States home improvement industry is driven by a combination of economic factors, housing market trends, the aging housing stock, sustainability and energy efficiency considerations, and technological advancements. These drivers continually shape the landscape of the industry, influencing consumer behavior, market conditions, and the strategies of home improvement businesses. To succeed in this dynamic sector, companies must remain attuned to these key drivers, adapt to changing circumstances, and offer solutions that align with the evolving needs and preferences of homeowners.

Key Market Challenges

Labor Shortages and Skilled Workforce

One of the most pressing challenges in the U.S. home improvement industry is the shortage of skilled labor. Construction workers, plumbers, electricians, and other tradespeople are in high demand, and the industry struggles to attract and retain qualified professionals. This issue is multifaceted:

Aging Workforce: Many skilled workers in the construction and home improvement sector are approaching retirement age. With a limited influx of younger talent, the industry faces a potential labor shortage crisis.

Lack of Vocational Education: Over the years, there has been a reduced emphasis on vocational education and apprenticeships, leading to a dearth of individuals with the necessary skills to fill these roles.

Seasonal and Unpredictable Demand: The industry often experiences seasonal fluctuations in demand, making it challenging to maintain a stable workforce throughout the year.

Competing Industries: The home improvement sector competes with other industries, such as technology and healthcare, for the same pool of skilled workers.

Addressing this challenge requires a multi-faceted approach, including vocational training programs, apprenticeships, and efforts to attract new talent to the industry. Businesses must also consider innovative labor management strategies, such as utilizing technology and automation to supplement the workforce during peak periods.

Supply Chain Disruptions and Material Costs

The U.S. home improvement industry is highly susceptible to supply chain disruptions and fluctuations in material costs. Recent events, such as the COVID-19 pandemic and natural disasters, have highlighted the vulnerabilities in global supply chains. These disruptions can result in delayed projects, increased costs, and potential profit margins.

Additionally, material costs can be volatile due to factors like fluctuations in commodity prices, trade tariffs, and transportation challenges. When material prices rise, it can lead to higher project costs, making it more difficult for homeowners to afford renovations and for businesses to maintain profitability.

The industry must develop strategies to mitigate these risks, including diversifying suppliers, maintaining larger material inventories, and seeking more sustainable sourcing practices. Accurate pricing and estimating, as well as clear communication with customers, are also critical to navigate these challenges effectively.

Regulatory Compliance and Environmental Sustainability

The U.S. home improvement industry is subject to a wide array of regulations at the federal, state, and local levels. Compliance with building codes, zoning laws, environmental regulations, and safety standards is essential to avoid legal issues and delays in projects. Navigating this complex regulatory landscape can be a significant challenge for businesses.

Moreover, there is a growing emphasis on environmental sustainability, which has led to stricter energy efficiency requirements and green building standards. Adhering to these sustainability guidelines can be costly and time-consuming, and businesses that do not meet these standards risk losing customers who prioritize eco-friendly practices.

Overcoming these challenges requires a deep understanding of the regulatory environment, regular training of staff on compliance matters, and staying informed about changes in building codes and sustainability standards. Many businesses are also adopting green building practices as a selling point to attract environmentally conscious customers.

Competition and Market Saturation

The U.S. home improvement industry is highly competitive, with numerous players vying for market share. This saturation can make it challenging for businesses to stand out and maintain profitability. Key factors contributing to this challenge include:

Big-Box Retailers: Major home improvement retailers like Home Depot and Lowe's dominate the market, making it difficult for smaller, independent businesses to compete on price and selection.

Online Retailers: E-commerce platforms offer a vast array of home improvement products, making it convenient for consumers to shop online and bypass traditional brick-and-mortar stores.

Franchise Chains: National and regional franchise chains, specializing in areas like kitchen remodeling or flooring, create stiff competition for smaller, local businesses.

To address this challenge, many businesses focus on niche markets and specialized services that cater to specific customer needs. Building a strong reputation for quality work, exceptional customer service, and local community engagement can also set businesses apart from larger competitors. Additionally, collaborating with other local businesses or forming alliances can help smaller enterprises pool resources and compete more effectively in the market.

In conclusion, the U.S. home improvement industry faces several formidable challenges, including labor shortages, supply chain disruptions, regulatory compliance, and intense competition. These challenges require businesses to be adaptable, innovative, and proactive in their strategies. Navigating these hurdles effectively involves investing in workforce development, implementing robust supply chain management, staying informed about regulatory changes, and finding ways to differentiate from the competition. By addressing these challenges, the U.S. home improvement industry can continue to thrive and meet the evolving needs of homeowners.

Key Market Trends

Sustainability and Eco-Friendly Practices

Sustainability has become a dominant trend in the U.S. home improvement industry. Homeowners are increasingly concerned about reducing their environmental footprint, conserving energy, and using eco-friendly materials. This trend is driven by a growing awareness of climate change and the desire to make homes more energy efficient.

Green building practices, such as using renewable and recycled materials, implementing energy-efficient solutions, and reducing water consumption, are gaining prominence. Home improvement projects often incorporate features like solar panels, LED lighting, energy-efficient appliances, smart thermostats, and low-flow fixtures.

Additionally, homeowners are seeking sustainable landscaping options that reduce water usage and promote biodiversity. Drought-tolerant plants, rainwater harvesting systems, and native landscaping are becoming more popular.

As the demand for sustainability continues to rise, businesses in the home improvement sector must adapt by offering eco-friendly products and services. This includes providing options for green building materials, energy-efficient upgrades, and expert guidance on sustainable practices. It can also involve educating customers about available incentives and tax credits for sustainable home improvements.

Smart Home Technology Integration

The integration of smart home technology is a trend that's rapidly reshaping the U.S. home improvement industry. Smart devices and systems are enhancing convenience, security, and energy efficiency in homes. Homeowners are increasingly investing in smart thermostats, lighting controls, security cameras, and voice-activated assistants like Amazon's Alexa or Google Assistant.

These technologies offer homeowners the ability to control and monitor various aspects of their homes remotely through smartphone apps. Smart home integration is not limited to new construction but can be retrofitted into existing homes. This trend also extends to the use of smart appliances, such as refrigerators, ovens, and washing machines, which provide increased functionality and energy efficiency.

For home improvement businesses, this trend presents opportunities to offer installation services and expertise in integrating smart home systems. Collaborating with technology providers and staying informed about emerging innovations is essential to meet the demand for this trend.

Aging-in-Place Renovations

The concept of "aging in place" is another significant trend in the U.S. home improvement industry. As the population ages, more homeowners are seeking to remain in their homes as they grow older, rather than relocating to senior living facilities. This trend has led to a growing demand for home renovations that enhance accessibility, safety, and comfort for elderly residents.

Aging-in-place renovations can include the installation of grab bars in bathrooms, wider doorways to accommodate wheelchairs, non-slip flooring, and ramps for easy access. These modifications allow older homeowners to live independently and comfortably in their homes for longer periods.

To address this trend, home improvement businesses are offering specialized services to assess homes and implement the necessary modifications for aging in place. This often involves collaborating with healthcare professionals to ensure that the renovations meet the specific needs of elderly individuals.

DIY and Home Improvement Influencers

The do-it-yourself (DIY) trend has gained considerable momentum in the United States. Many homeowners are taking on home improvement projects themselves, drawn to the satisfaction of accomplishing tasks and the cost savings associated with DIY work. This trend has been further fueled by online resources, tutorials, and social media platforms, which provide easy access to information and inspiration for DIY projects.

Home improvement influencers and content creators on platforms like YouTube, Instagram, and TikTok have a significant impact on this trend. They share step-by-step tutorials, design ideas, and product recommendations, empowering homeowners to tackle various projects, from painting and tiling to more complex tasks like kitchen remodeling.

For businesses in the home improvement industry, embracing the DIY trend involves catering to DIY enthusiasts with quality products, tools, and educational resources. It also means recognizing that while many homeowners enjoy DIY projects, they may still seek professional assistance for larger, more complex renovations. Offering a range of products and services that cater to both DIYers and those in need of expert help can be a successful strategy.

Segmental Insights

Product Insights

Home decor has emerged as the fastest-growing segment within the United States home improvement industry. This trend is driven by shifting consumer preferences and lifestyle changes. As homeowners seek to personalize and enhance their living spaces, they are increasingly investing in interior design, furniture, wall art, lighting, and other decor elements.

Several factors contribute to the rapid growth of the home decor segment. First, the rise of online shopping and the availability of e-commerce platforms have made it easier for consumers to discover and purchase decor items. Second, the influence of social media, design-focused television shows, and home decor influencers has sparked a greater interest in interior design and inspired individuals to refresh their living spaces. Additionally, as people spent more time at home during the COVID-19 pandemic, the desire to create comfortable and aesthetically pleasing environments gained even more significance, further boosting the home decor market.

Sales Channel Insights

Online sales have rapidly become the fastest-growing segment within the United States home improvement industry. This trend is propelled by the digital transformation and changing consumer behavior. As more homeowners turn to the internet for convenience and a wide range of product choices, the online market for home improvement goods has witnessed remarkable growth.

Several factors contribute to this surge in online sales. First, the convenience of shopping for home improvement products from the comfort of one's home has greatly appealed to consumers, enabling them to browse, compare prices, and make purchases at their own pace. Second, the extensive product selections available on e-commerce platforms, coupled with user reviews and recommendations, make it easier for customers to find the right solutions for their projects. Third, online retailers often offer competitive pricing and convenient delivery options.

Moreover, the COVID-19 pandemic accelerated the shift towards online shopping as people aimed to minimize in-store visits. This trend has continued to gain momentum, making the online segment the fastest-growing category within the U.S. home improvement industry.

Regional Insights

The assertion that "South" is the dominant region in the United States home improvement industry requires clarification, as the home improvement sector's influence is not typically attributed to a geographic region in the same way that specific states, cities, or metropolitan areas may have dominance. The home improvement industry's dynamics are driven by a myriad of factors including economic conditions, housing market trends, and consumer preferences, which can vary significantly across the United States. While the South may indeed have a strong presence in the industry due to its population density, diverse housing stock, and regional characteristics, it would be more accurate to analyze specific states or metropolitan regions within the South that are prominent players in the home improvement sector. These regions would have unique influences and dynamics that contribute to their prominence in the industry.

Report Scope:

In this report, the United States Home Improvement market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

United States Home Improvement Market, By Product:

  • Building & Remodeling
  • Home Décor
  • Outdoor Living
  • Tools & Hardware

United States Home Improvement Market, By Project:

  • DIFM
  • DIY

United States Home Improvement Market, By Sales Channel:

  • Homeware Stores
  • Franchised Stores
  • Specialty Stores
  • Online
  • Others

United States Home Improvement Market, By Region:

  • South
  • West
  • Mid-West
  • North-East

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the United States Home Improvement market.

Available Customizations:

United States Home Improvement Market report with the given market data, the publisher offers customizations according to a company's specific needs.

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Table of Contents

1. Introduction
1.1. Product Overview
1.2. Key Highlights of the Report
1.3. Market Coverage
1.4. Market Segments Covered
1.5. Research Tenure Considered
2. Research Methodology
2.1. Objective of the Study
2.2. Baseline Methodology
2.3. Key Industry Partners
2.4. Major Association and Secondary Sources
2.5. Forecasting Methodology
2.6. Data Triangulation & Validation
2.7. Assumptions and Limitations
3. Executive Summary
3.1. Market Overview
3.2. Market Forecast
3.3. Key Regions
3.4. Key Segments
4. Voice of Customer
4.1. Factors Influencing Purchase Decision
4.2. Challenges Faced Post Purchase
4.3. Brand Awareness
5. United States Home Improvement Market Outlook
5.1. Market Size & Forecast
5.1.1. By Value
5.2. Market Share & Forecast
5.2.1. By Product Market Share Analysis (Building & Remodeling, Home Décor, Outdoor Living, Tools & Hardware)
5.2.2. By Project Market Share Analysis (DIFM, DIY)
5.2.3. By Sales Channel Market Share Analysis (Homeware Stores, Franchised Stores, Specialty Stores, Online, Others (Direct Sellers, General Merchandised Retailers, etc.))
5.2.4. By Regional Market Share Analysis South Market Share Analysis West Market Share Analysis Mid-West Market Share Analysis North-East Market Share Analysis
5.2.5. By Top 5 Companies Market Share Analysis, Others (2022)
5.3. United States Home Improvement Market Mapping & Opportunity Assessment
5.3.1. By Product Market Mapping & Opportunity Assessment
5.3.2. By Project Market Mapping & Opportunity Assessment
5.3.3. By Sales Channel Market Mapping & Opportunity Assessment
5.3.4. By Regional Market Mapping & Opportunity Assessment
6. United States Building & Remodeling Market Outlook
6.1. Market Size & Forecast
6.1.1. By Value
6.2. Market Share & Forecast
6.2.1. By Project Market Share Analysis
6.2.2. By Sales Channel Market Share Analysis
7. United States Home Décor Market Outlook
7.1. Market Size & Forecast
7.1.1. By Value
7.2. Market Share & Forecast
7.2.1. By Project Market Share Analysis
7.2.2. By Sales Channel Market Share Analysis
8. United States Outdoor Living Market Outlook
8.1. Market Size & Forecast
8.1.1. By Value
8.2. Market Share & Forecast
8.2.1. By Project Market Share Analysis
8.2.2. By Sales Channel Market Share Analysis
9. United States Tools & Hardware Market Outlook
9.1. Market Size & Forecast
9.1.1. By Value
9.2. Market Share & Forecast
9.2.1. By Project Market Share Analysis
9.2.2. By Sales Channel Market Share Analysis
10. Market Dynamics
10.1. Drivers
10.2. Challenges
11. Impact of COVID-19 on United States Home Improvement Market
11.1. Impact Assessment Model
11.1.1. Key Segments Impacted
11.1.2. Key Regions Impacted
12. Market Trends & Developments
13. Porter’s Five Forces Model
13.1. Competitive Rivalry
13.2. Bargaining Power of Buyers
13.3. Bargaining Power of Suppliers
13.4. Threat of New Entrants
13.5. Threat of Substitutes
14. SWOT Analysis
14.1. Strengths
14.2. Weaknesses
14.3. Opportunities
14.4. Threats
15. Policy and Regulatory Landscape16. United States Economic Profile
17. Competitive Landscape
17.1. Company Profiles
17.1.1. The Home Depot U.S.A., Inc. Company Details Product & Services Financials (As Per Availability) Key market Focus & Geographical Presence Recent Developments Key Management Personnel
17.1.2. Lowe’s Companies Inc. Company Details Product & Services Financials (As Per Availability) Key market Focus & Geographical Presence Recent Developments Key Management Personnel
17.1.3. Menard Inc. Company Details Product & Services Financials (As Per Availability) Key market Focus & Geographical Presence Recent Developments Key Management Personnel
17.1.4. ACE Hardware Corporation Company Details Product & Services Financials (As Per Availability) Key market Focus & Geographical Presence Recent Developments Key Management Personnel
17.1.5. True Value Company Company Details Product & Services Financials (As Per Availability) Key market Focus & Geographical Presence Recent Developments Key Management Personnel
17.1.6. 84 Lumber Company Details Product & Services Financials (As Per Availability) Key market Focus & Geographical Presence Recent Developments Key Management Personnel
17.1.7. Floor & Decor Holdings Inc. Company Details Product & Services Financials (As Per Availability) Key market Focus & Geographical Presence Recent Developments Key Management Personnel
17.1.8. 3M Company Company Details Product & Services Financials (As Per Availability) Key market Focus & Geographical Presence Recent Developments Key Management Personnel
17.1.9. Kohler Company Company Details Product & Services Financials (As Per Availability) Key market Focus & Geographical Presence Recent Developments Key Management Personnel
17.1.10. ABC Supply Co., Inc. Company Details Product & Services Financials (As Per Availability) Key market Focus & Geographical Presence Recent Developments Key Management Personnel
18. Strategic Recommendations
18.1. Key Focus Areas
18.2. Target Product
18.3. Target Sales Channel
19. About the Publisher & Disclaimer

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • The Home Depot U.S.A., Inc.
  • Lowe’s Companies Inc.
  • Menard Inc.
  • ACE Hardware Corpoartion
  • True Value Company
  • 84 Lumber
  • Floor & Decor Holdings Inc.
  • 3M Company
  • Kohler Company
  • ABC Supply Co., Inc.

Table Information